So Your CEO Wants To Host A Campaign Fundraiser?
Kelley Drye Client Advisory
BackgroundSenior corporate executives are periodically asked to host congressional (or presidential) campaign fund-raisers. Companies cannot host or pay for them, but executives may organize them as campaign volunteers. Early coordination with the campaign is critical to success and full compliance.
RestrictionsBeyond the ban on corporate contributions, using corporate resources (support staff time, copiers, etc.) to raise, collect, or even handle campaign contributions is illegal “facilitation.” Only individual U.S. citizens or green card holders, and federal PACs, may contribute. The limits are $2,700 (individuals) and $5,000 (PACs) per election, including any “in-kind” contributions provided, such as the event’s food and drinks.
RequirementsAs campaign volunteers, executives who organize campaign fundraisers must ensure their solicitations include the necessary disclaimers. Most campaigns will provide a template invitation that includes this content. After the event, a volunteer must provide copies of event costs and payment—such as invoices for the company meeting room and catering—to the campaign for its disclosure to the Federal Election Commission. Alternatively, the campaign may pay all vendors directly. Most campaigns are comfortable spending about 5 percent of the amount raised at the event. Campaigns may also ask the event hosts if any lobbyists raised some or all of the contributions for the campaigns’ “bundling” reports.
- Work with the campaign’s finance staff early to discuss who will pay the event’s costs, set a date, prepare the invitation, and decide who will staff (e.g., take RSVPs) the event.
- The campaign, a PAC, or individual donor can pay event costs (conference room, catering, support staff, postage, etc.).
- Identify only executives (may use titles for ID purposes) or PACs as event sponsors.
- Do not use company support staff unless the campaign, a PAC, or an individual donor reimburses the company in advance.
- Do not say the company is the event host (but the company’s PAC may host).
- Do not handle contributions (tell donors to send them directly to the campaign).
- Do not imply that the candidate will owe donors any favors.
Additional ThoughtsThese guidelines apply only to federal fundraisers. State and local laws vary, though are often similar. Companies have more flexibility to raise contributions for their corporate PACs or contribute to Super PACs. The difference between compliance and enforcement risk is not always apparent. If you are unsure whether a given course of action risks violating the rules and attracting an enforcement proceeding…ask.